By Dan Bell
The NZD/USD opens around 0.8170 after coming under pressure in the late NY session on Friday night.
US employment numbers came in stronger than expected with the unemployment rate dropping to 7.8% (expectations: 8.2%), payroll numbers rose 114k (as expected) and previous months were revised up.
The market reaction to the US employment numbers was initially very positive and it was ‘risk on’ - equities and commodities rallied, the US Dollar came under pressure but within a couple of hours stocks reversed most of their gains and the USD strengthened across the board.
The NZD dropped to a low of 0.8152 and the AUD/USD slid to a low of 1.0152. The S&P 500 ended the day flat and commodities lower.
The NZD opens at current indicative mid rates: 0.8035 AUD, 0.6270 EUR, 0.5065 GBP, 64.25 JPY, and 0.7990 CAD.
Not much top report on the local front today. It’s a holiday in Japan and the US today so expect it will be a quiet start to the week.
Tomorrow we get NZ Quarterly Survey of Business Opinion which is the only significant announcement on the local front this week.
Offshore we get the start of Q3 earnings season in the US where it will be interesting to see how corporate profits are holding up.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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